Private house-building plummets as output shrinks | News

Data published by the Office for National Statistics this week showed that £2.99 billion of new private housing work took place in the last month of last year. This was down 6.8 per cent from the previous month, even allowing for seasonal adjustments.

Overall construction output dropped by £388 million to £13.5 billion over the same period. This 2.8 per cent drop was the largest since June 2012 – before the London Olympics.

There were some bright spots. Public house-building was up 10.9 per cent to £587 million in December, while other public-sector buildings work grew 4.5 per cent to £832 million. Industrial work was up 3.7 per cent.

But commercial work declined by 1.2 per cent and repair and maintenance work across all sectors dropped by 5 per cent.

Overall construction work was 2.4 per cent lower in December than in the same month the previous year.

Blane Perrotton, managing director at surveyor Naismiths, said the brakes had been ‘slammed on’ in construction.

‘The prime suspect in construction’s reversal of fortune is its previously gravity-defying house-building sector,’ he added. ‘A 6.8 per cent drop in new work consigned residential construction to also-ran status.

‘Against this grim backdrop, confidence is ebbing away. Labour shortages and rising material costs are eating into margins, and intense competition for the little work that is being put out to tender is forcing contractors to bid painfully low.

‘Among developers, the sense that a messy no-deal Brexit is now a very real danger has choked off demand, and investment is being deferred where it can be. Barring an improbable resolution to Britain’s Brexit deadlock in coming weeks, this painful inertia is set to continue.’